Private lender Bank Central Asia (BCA) is hoping it will be able to maintain double-digit growth this year despite the country'€™s less promising economic outlook.

BCA president director Jahja Setiaatmadja said the bank has projected growth of between 12 and 15 percent in its lending, slightly higher than the 11 percent growth rate that it posted throughout 2014.

'€œWe will still see demand for loans grow this year, despite being relatively flat during the first quarter. However, we expect that for the rest of the year, these demands will come from our corporate, mortgage and commercial segments,'€ he told reporters on Thursday.

With such a target range, BCA'€™s total outstanding loans are estimated to reach at least Rp 388.15 trillion (US$29.81 billion) by year-end.

Infrastructure would be among the economic sectors that it will target this year, Jahja said, adding that it would carefully select the projects that matched its funding structure.

'€œWe may go into syndicated financing with other lenders for various infrastructure projects, but it would be best if the companies or the clients could raise their own financing from the capital market after five years. That way, we will have an exit strategy,'€ he added.

In third-party funds or DPK, BCA also plans to maintain at least the same annual growth rate as what it reported in 2014, which was 9.4 percent.

'€œIf it turns out that we are able to generate more funding, we may disburse higher amounts of loans. We'€™ll see, but our aim is to keep our LDR [loan-to-deposit ratio] at between 74 percent and 80 percent,'€ Jahja said.

Meanwhile, according to its latest financial report, BCA '€” still the largest private bank in terms of asset size '€” reaped a total of Rp 16.49 trillion in net profits in 2014, which was 15.7 percent higher than in the previous year.

Its net interest income rose 21.2 percent year-on-year to Rp 32.05 trillion and its non-interest income climbed 13.5 percent year-on-year to Rp 9 trillion. The report also shows that it managed to slightly increase its net interest margin (NIM) by 26 basis points (bps) to 6.53 percent.

BCA vice president director Eugene K. Galbraith attributed the higher NIM to the higher loan yields that it posted in 2014.

'€œOur average costs of funds did increase because of rising interest rates last year, up to 2.61 percent from 1.95 percent. However, our loan yield grew as well to 8.71 percent from 7.79 percent,'€ he said.

The rising costs of funds were reflected within BCA'€™s time deposit portfolio, which jumped significantly by 28.8 percent to Rp 111.49 trillion.

The time deposits became the only DPK component that recorded a higher growth rate on an annual basis, whereas the growth rate of both savings and demand deposits slowed compared to 2013.

Jahja said the bank had begun slashing the interest rates of its time deposits regularly since August 2014 to reduce costs. '€œThe decline has been between 25 bps and 50 bps and we monitor this every month. We may reduce the time deposit rate again if our liquidity remains overflowing,'€ he added.

Indonesia'€™s economic growth slipped to 5.02 percent in 2014, its weakest in five years.

In December 2014, the World Bank cut its projection for Indonesia'€™s economic growth in 2015 to 5.2 percent from 5.6 percent because of the weak outlook for fixed investments and trade, as well as the slowing pace of loan expansion.

Popular

RI, Australia strengthen partnership on taxing crypto assets

Analysis: Indonesia denies normalization with Israel to enter OECD

Citroen to produce electric cars in Indonesia